Mandatory mediation is back in Italy with new parliamentary rules
Da Alternatives - October 2013, la rivista del CPR di New York. If a nation’s court system leads its 5.4 million thirsty horses to water, the vast majority will drink. In this case, the horses are litigation matters. And the thirst quencher is mediation. This summer, the Italian Parliament “converted into law” new mediation rules approved by the government in Law Decree 69 of June 21, 2013. The August 9 parliamentary act contains new mediation rules that went into effect last month. Parliamentary approval of the mediation rules, including the controversial mandatory mediation requirement, resolves the constitutionality issue that had led, in October 2012, to the quashing of 2010 mandatory mediation rules. The court decision that struck the 2010 rules brought mediation in Italy to a virtual halt. Notorious delays in Italy’s civil justice system cost the nation an estimated 1% of its gross domestic product annually, or 16 billion Euros. They have contributed to Italy’s dropping rankings in the World Bank’s Doing Business report. About 5.4 million civil disputes clog the Italian courts. By implementing mandatory mediation in March 2011, the government hoped to shift more than one million disputes out of the court system within five years. More than 220,000 mediations were started, close to half of which settled when the defendant accepted mediation—a stunning success, particularly in light of the usual three year wait for a court decision. (The waits rise to nine years with an appeal.)
Despite this success—unprecedented in a European Union hesitant to impose mandatory mediation—the mandate faced determined opposition from part of the Italian bar. The mediation explosion came to a sudden end in October 2012, when the 15 judges of the Italian Constitutional Court ruled that the mandatory mediation provisions were unconstitutional. See Giuseppe De Palo and Ashley Oleson, “Lessons on Mediation in Italy: Bring Back Mandatory!” 31 Alternatives 54 (April 2013). Rumors say that it was an 8–7 decision. Regardless, virtually all pending mediations in Italy stopped, even those that had been initiated voluntarily. Other EU states that had been considering mandatory mediation, and monitoring developments in Italy, suspended their plans. Italy once again confronted the “EU mediation paradox”: Despite mediation’s effectiveness— and the 2008 adoption of an EU Directive on European law on mediation in civil and commercial matters (see “The Directive Is In: European Union Strongly Backs Cross-Border Mediation,” 26 Alternatives 119 (June 2008))—disputing parties tend not to use it unless required to do so. The directive can be found at http://bit.ly/16fvF45.
A May 2011 study showed that even with a success rate of only 30%—significantly lower than that achieved in Italy after the mandatory mediation introduction—mediation reduces the time and cost of judicial dispute resolution. [Editor’s note: The study, co-authored by Giuseppe De Palo, is discussed in the April 2013 Alternatives article cited above, and can be found here: http://bit.ly/wExl2W.] But critics of mandatory mediation continue to raise the old chestnut that “You can lead a horse to water, but you can’t make it drink.” The retort to this statement is obvious: “You may not be able to make it drink, but it probably will, given the chance.”
In the Italian dispute resolution setting, the success of the first mandatory mediation effort already had started to prove this true. Facing these arguments and the continuing crisis in Italy, Minister of Justice Anna Maria Cancellieri undertook the job of rewriting the mediation rules, again opting for mandatory mediation, with several important modifications.
First, motor vehicle accident disputes are exempt from mandatory mediation. Second, for a nominal cost, litigants are now allowed to withdraw from the mediation process at the initial stage if they deem settlement unlikely. This opt-out system provides an actual “mediation experience” to litigants and includes a powerful quality assurance device: if the mediator is not good, either party may withdraw. But “there is no rose without thorns,” as an Italian saying goes. The new mediation rules, which were effective as of September 20, also reintroduced a controversial mechanism to ensure that parties think twice before withdrawing from mediation without reaching a settlement. Upon a party’s withdrawal, the mediator may propose a solution to the dispute. If it is rejected and the case goes to trial, the judge may shift onto the rejecting party all mediation and litigation costs subsequent to the mediator’s proposal if the judgment is consistent with the proposal. Judges also have the power, at any stage in the dispute, to order the parties to mediation— not just to invite them. The new law also introduces a four-year trial period that ends September 2017, with a mid-term review to be conducted by the Justice Minister by September 2015. The law also requires that mediation parties be assisted by counsel.
These elements, which were not part of the June 21, 2013 decree, were vigorously advocated for by members of the Italian bar during the process of converting the decree into law. Parliament eventually accepted them. Based on early official reaction, the Italian bar appears generally satisfied with the new mediation framework. In light of this, commentators predict that Italy is now set to witness an even bigger “mediation explosion” than before—and this time a more stable one. As a related consequence, some predict that the Italian mediation model might inspire similar moves in a number of other EU countries struggling with court budget cuts, increasing litigation costs, and delays—where, after many years of attempts to promote mediation, the process remains virtually unused. The regulatory history of Italian mediation is, however, far from finished. For instance, the legal requirement that mediation parties be assisted by counsel may run counter to the recent EU Consumer ADR Directive.